It is not a good time to be young. Our youth are bearing the brunt of the economic depression and its self-defeating solution of austerity and cuts. The future to them looks bleak; unemployment, debt and homelessness in various combinations, or all three beckon. Of course, these three scourges (unemployment-debt-homelessness) are linked.
A report entitled “Youth unemployment: the crisis we cannot afford” produced by ACEVO (Association of Chief Executive of Voluntary Organizations) puts the human cost thus:
Unemployment hurts at any age; but for young people, long-term unemployment scars for life. It means lower earnings, more unemployment, [and] more ill health later in life. It means more inequality between rich and poor – because the pain hits the most disadvantaged.
The report quantifies the financial cost as follows:
The human misery of youth unemployment is also a time-bomb under the nation’s finances. At its current rates, in 2012 youth unemployment will cost the [British] exchequer £4.8 billion (more than the budget for further education for 16-to-19-year-olds in England) and cost the economy £10.7 billion in lost output. But the costs are not just temporary. The scarring effects of youth unemployment at its current levels will ratchet up further future costs of £2.9 billion per year for the exchequer (equivalent to the entire annual budget for Jobcentre Plus) and £6.3 billion p.a. for the economy in lost output. The net present value of the cost to the Treasury, even looking only a decade ahead, is approximately £28 billion.
A study in the US on the effects of unemployment on crime concludes:
We find significantly positive effects of unemployment on property crime rates that are stable across model specifications. Our estimates suggest that a substantial portion of the decline in property crime rates during the 1990s is attributable to the decline in the unemployment rate.
“Unemployment sucks. Youth unemployment sucks even more”, as one business school professor puts it.
Faced with such personal, societal and financial costs, the response of governments has been at best complacent, but more accurately described as negligent. You would think the scourge of unemployment would be prioritized and made central to any actions that are taken. Instead, governments have put deficit-reduction at the centre of their economic policy, and ignored its impact on society.
It is no good saying the solution we are pursuing will in the long run produce the required result, not if it blights the lives of a significant number of our youth. As someone said “in the long run we will all be dead”.
Moving to homelessness, according to figures published by the department for communities and local government, 48,510 households meet the definition of statutory homelessness in 2011, a jump of 14% on the previous year. Research for the charity Crisis, found that the vast majority of homeless single people are “hidden” and outside government statistics.
If you are lucky enough to go to university, you will be finishing your course with a debt of around £53,000. With such debts, graduates will be reluctant to take additional debt in the form of a mortgage, and with the price of housing, most will not be earning enough to get a mortgage. Additionally, scarcity of affordable rented dwellings will force many graduates to live with their parents, thus delaying their entry into adulthood and independence. What effect will that have on their self esteem, mobility of labour, and at what cost to the economy!
There is evidence that the rise in university fees is putting off students from modest and poor backgrounds, which will impact negatively on social mobility, thus deepening the income inequality and division in our society. Reversing the rise is a good investment in Britain’s future.
Investing taxpayers’ money in massive building programmes of affordable housing would provide work for many of our young, and would help with labour mobility. It would provide for a basic need, and would prove cheaper to the taxpayer in the long run.
Loading most of the misery of the economic depression on our youth is morally wrong, economically mad, and eventually self-defeating.